Month: September 2012

Recently, the world’s #1 PC producer, HP has announced that they are going to lay off an additional 2000 more employees than anticipated. Bringing the number of employees to be fired from 27,000 to 29,000. HP will cut jobs through a combination of voluntary cuts, involuntary cuts and also early retirement offers.

          A reason as to why HP is undergoing such massive restructure may be due to the competition brought on by PC producing powerhouse, Lenovo. In data released by the IDC IN July, we can see that Lenovo is in second place with 14.9 market share while HP owns 15.5% of the market. A really small difference in market share as HP is in decline while Lenovo is “rocketing ahead”. Some

     Another reason why HP has begun this multi-year restructuring is because the company is changing its focus from producing personal computers to services targeted at corporations, similar to the change IBM did a few years back. The difference however this time is that IBM was successful in selling their PC producing division while HP could not find a buyer for the PC producing division

     When companies layoff employees, the reasons may be just or unjust. Some may argue that often or not, laying off employees is the easiest or rather laziest way to cut costs rather than to look for other non-consumer related costs, as these costs may be harder to find. The long term restructuring also may cause employees to feel, as they feel insecure about their jobs therefore according to Maslow’s hierarchy of needs, ‘safety’ is not met thereby employees would not be able to have motivation to give their 100% to the company and productivity of the company will likely decline. At the same time according to the stakeholder theory; which is the idea that companies cannot look at stakeholders individually. HP is not able to make their employees feel secure so again employees are not willing to input 100% of their effort in making the company or firm better.

All in all, with reference to details above, HP seems to have a difficult path ahead. The biggest question remains is if HP can keep the crown for most PCs produced and whether or not they have a plan to keep their employees motivated.